This GM strike is just like US politics– deadlocked.  There’s bad  positioning- coupled with the lack of honesty in explaining why that position was taken in the first place.

Sure, the unions are pissed off that they gave GM tremendous concessions a decade ago, allowing GM to  turn the corner.  But, the UAW expected something in return.

The current strike has been going on for 22 days.  That’s half as long as the strike back in 1936-37.  That one was 44 days long- and led to GM agreeing that the UAW was the worker’s union.  The longest strike since the 1970’s lasted 67 days- and  if this strike extends to that range, GM will be decimated.  As the strike approaches someplace between 50 and 70 days, GM’s potential customers won’t have vehicles to buy.

Here are some other facts.  (Please note that “alternative facts” have no place in politics, sci/tech- or business.)

GM now has a slew of “temporary” workers, and the unions want those guys to be part of their crew- at union wages.  The union also ceded part of their already earned union rates to keep GM profitable.

How did that arrangement turn out?  GM is profitable.  Except for when it had all those costs for the recall (for pre-Great Recession design errors [that drop ca. 2012 shown below]), it has been profitable.   Mary Barra, the talented GM leader, is handsomely compensated.

But…

The paradigm has changed.  No longer is the big question which car America (and the world) wants to buy.

Nope.  Now the big question is how to sell the world on buying cars in the first place.  Too many folks are no longer buying cars- and if they are, they are seeking partial ownership (sharing the car and its costs with others).  So, the pie to be split between GM management, GM stockholders, and the UAW is operating in very unfamiliar territory.

As I stated previously, since the Great Recession, the US no longer is a two car per household place.  And, the age of the average owner is way up there- in AARP territory for sure.  So, it’s not surprising that the GM assembly line workforce has shrunk from 511K (in 1979) to some 49K UAW workers with about 3K “temporary” workers today.

GM (and every other car manufacturer) has no desire to sell those vehicles that get great gas mileage.  Nope.  The money is in the SUVs and the luxury cars.  Which is why all those small car plants are being closed.  (You do realize that’s why those $ 5000 discounts/rebates abound on the larger vehicles- because it only dents their deep profitability.)

Oh- and when and if we finally have a plethora of all-electric vehicles rolling out of the assembly line, there will be fewer worker hours per car.  Because there are fewer moving parts per electric car.

And, consider this.  Auto wages in the US are down to about $ 25 an hour (from their peak in 2002 at $ 30.90).  While the auto worker in Mexico reaps about $3.50  an hour-  with reasonable productivity.   Even if the Mexican plant productivity is half that of that prevailing in the States, the overall cost factors are still tilted in Mexico’s favor.   So, the UAW demands to bring those jobs “back home” are going to be resisted by management.

The only way forward that I see  is to have GM truly share the profits with the UAW.  Keep executive salaries at 100X the average wage (with overtime) for the workers.  And, the UAW must acknowledge that their 49,000 member base is not going to grow to 52,000 or more in the long term- but shrink down closer to 40,000.

Yes, that will mean that GM’s profit margin may not be 5.5%- probably ranging closer to 4 to 4.5%.  But, it will have stable production, talented workers, and a chance to control the world market in the electric vehicles it is bringing on line.